Stocks advance, sterling rises despite confidence vote in PM

Positive signs on outlook for US-China trade talks lift markets

British Prime Minister Theresa  May is facing a no confidence vote after 48 Conservative MPs sent letters indicating a loss of belief in her ability to successfully navigate a Brexit deal. Photograph: Julien Warnand/EPA

British Prime Minister Theresa May is facing a no confidence vote after 48 Conservative MPs sent letters indicating a loss of belief in her ability to successfully navigate a Brexit deal. Photograph: Julien Warnand/EPA

 

Stocks advanced globally following positive signs on the outlook for US-China trade talks, and the pound edged higher even as a vote of confidence in the British prime minister was announced.

In the UK, markets took news that Theresa May will face a vote of confidence from the Conservative Party she leads in stride, with sterling and gilts both nudging higher.

US equity futures and European shares climbed following big gains in Asia after Canada granted bail to the chief financial officer of China’s Huawei Technologies and President Donald Trump said he’d consider intervening in the case if it helped get a China deal.

As well as the roller coaster news flow on the trade war and Brexit, investors are also keeping watch on the risk of a shutdown of parts of the federal US government, with Mr Trump at odds with Democratic leaders in Congress over funding for a border wall with Mexico.

Elsewhere, oil traded around $52 a barrel in New York, and Treasuries were flat after Trump warned the Federal Reserve against hiking interest rates this month. India’s bonds rallied after an ally of Prime Minister Narendra Modi was named as new central bank chief.

In France, the spread between government bond yields and those in Germany rose to the highest since the 2017 election. France’s Prime Minister Edouard Philippe confirmed that President Emmanuel Macron’s efforts to meet protester demands will have an impact on the country’s deficit, with the situation causing a new headache for the EU in its talks over the Italian budget. – Bloomberg